When the company is small, any issues regarding subordination and separation of powers are easily resolved. But when she grows up a little, and she inevitably begins to experience difficulties of a "transitional" age: some people have too many powers, while others do not withstand the burden of their duties, others simply take off from work, etc. This situation, I think, is familiar to many. In order to quickly survive this period, the manager needs to think carefully about what kind of company the final organizational structure should be. Let's take a brief look at the pros and cons of the main types.
Linear Functional Organizational Structure
Systems using this type of organization of interaction are built on the principles of a rigid hierarchy. Such a scheme has proven itself in small enterprises and is based on the authority and high professionalism of the manager, who, as a rule, is also the owner of such a company. The essence of this structure is that employees report to their immediate superiors, while individual verticals can perform special functions (quality control department, accounting, security).
The advantages of such a labor organization are that everything is set up to get the result of labor, there is good control and discipline, and the products are stably of the same quality. The main disadvantages that this organizational structure has are the big loss of time for making important decisions, the distortion and loss of information during its transmission along the hierarchy, as well as the lack of flexibility. Since the current market situation is changing quite rapidly, such a structure is obsolete and is suitable only for small firms or monopolists like Gazprom.
Divisional Organizational Structure
This is such a form of work organization, which involves the functioning of relatively independent units. Such divisions are managed from headquarters. The principle of creating units can be based on the geographical location of fixed assets, product mix, targeting corporate and mass customers, etc. This type of building a business has become quite widespread in our country. Its main advantages are excellent customer service and flexibility. But the disadvantages include the complexity of control of branches (divisions) and high management costs due to the emergence of many directors.
Project Organizational Structure
This is the youngest and most progressive type of organization of interaction between employees. Companies in which this structure was implemented appeared in the second half of the twentieth century. At that time, market instability forced many owners to expand their product range in order to be able to benefit in time from changing demand and the current situation. Such a structure involves the organization of a unit for each new large client. Such a department has its own project director and all the necessary links at different levels of subordination. Moreover, the same employees can participate in several projects at once. The advantage of such an organization is maximum flexibility, and the main disadvantages are the high cost of maintaining managers.
Matrix Organizational Chart
This is a kind of symbiosis of linear functional control with project management. Despite the fact that this term has become very fashionable today, implementing a matrix approach in practice is not so simple. Nevertheless, General Electric, which has been improving its management system for almost 12 years, ultimately decided that it was the best organizational structure for it. An example of the success of this and many other companies applying the matrix approach does not give rest to many managers, and therefore it is so popular now.
The essence of this structure is that control occurs both vertically and horizontally. That is, instead of one, there are several centers of equal rights, which are usually played by project managers. For example, all marketers working in each of the verticals are included in the marketing department. The matrix approach is good in that it eliminates the disadvantages of the linear structure - distortion (loss) of information and lack of flexibility. However, when implemented, the risk of a conflict of interest is high. When the principle of unity of command is violated, it is sometimes difficult to find out whose task to perform first and what to do if several instructions are contradictory.
Conclusion
As you can see, each type of control is good in its own way. There is no ideal universal option, and when choosing an organizational structure, you need to be guided by those factors that directly affect the activities of each particular enterprise.